For shipments going to European hinterland locations, Hamburg, Antwerp, and Rotterdam carry similar D&D charges. Photo credit: Shutterstock
Online container logistics provider Container xChange is offering a free detention and demurrage (D&D) calculator that will allow shippers to assess the potential cost of D&D charges on the different port-to-port routes, and their comparability across carriers.
With supply chain disruption from measures to limit the spread of the coronavirus disease 2019 (COVID-19) — e.g., extensive blanked sailings, skeleton crews at terminals, and intermittent cross-border congestion — there have been reports of delays in the handling, collection, and return of boxes. This has led to calls from shipper and forwarder associations for carriers to “exercise restraint” and extend free time allocations if required by customers.
“Especially during COVID-19, comparing demurrage and detention (D&D) charges levied by the shipping lines across the world’s biggest ports is important to avoid unnecessary costs,” Florian Frese, marketing lead at Container xChange, told JOC.com.
While no historical data on global D&D levels is available yet — Container xChange only began collating the data this year — the D&D calculator already has more than 20,000 data points from publicly available sources on how much the 10 biggest shipping lines charge for D&D across the world’s top 20 ports.
“While there is an ongoing discussion — if not to say dispute — between shipping lines and freight forwarders and BCOs (beneficial cargo owners) about the applicability and level of charges, there is no transparency on how expensive it can get, and no possibility to effectively compare shipping lines and ports,” Container xChange noted in a statement Tuesday.
Data collected by the tool show that both demurrage and detention charges rise quickly after initial so-called free days to an average of $123 per TEU across ports and shipping lines after seven days and $537 per TEU after 14 days.
Wide variations in D&D charges
An analysis of the Container xChange data also found that D&D charges varied by $190 per TEU on average across the 20 biggest global container ports. Busan in South Korea was the cheapest port with an average of $6.46 per day, compared to $196.88 per TEU per day in Los Angeles. In Europe, Antwerp was the cheapest port in terms of D&D charges, followed by Rotterdam, and Hamburg.
For shipments going to European hinterland locations, Hamburg, Antwerp, and Rotterdam carry similar D&D charges, but the port of Hamburg comes in as the most expensive with a charge of $65 per TEU per day on Day 14, followed by Rotterdam at $53, and Antwerp at $49.
In an example of how shippers could benefit from comparing D&D charges by carriers calling at different ports, Container xChange noted that Hamburg was $60 per TEU per day cheaper if a shipper chose Yang Ming at $21 per container per day instead of Maersk Line, which charges $76 per container per day in Antwerp.
“Additionally, we can see that all ports (excluding Antwerp exports) have higher demurrage charges compared to detention, which indicates that these ports are prone to congestion,” the Container xChange statement said. “Through raising demurrage charges, ports and terminals try to incentivize BCOs, forwarders, and shippers to pick up containers on time in order to prevent congestion.”
Another factor influencing D&D costs is free time allocation, which also varies across the major hub ports. In Long Beach, for example, a TEU can only be used for four days at no cost, while in Busan the average is 10 free days.
Contact Greg Knowler at [email protected] and follow him on Twitter: @greg_knowler.
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